barack obama, Chevy Volt, Donald Trump, EVs, General Motors, green street red, Not ready for prime time
The day I’ve anticipated for years, ever since I began writing about electric vehicles exemplified by the Chevy Volt, back in 2011, has arrived. GM has announced the imminent demise of the Volt. In 2012’s The Chevy Volt: It Doesn’t Get Any Better Than This, I wrote:
* Three days after Mr. Obama’s hubristic promise to buy a Volt as soon as he leaves office, GM announced that it would suspend Volt production for five weeks—it now looks like that suspension will be even longer—to more closely match supply with demand. Translation: Volts aren’t selling. [skip]
On the economic front, the Volt is selling so well, GM has dropped the monthly lease rate from $399 to $350 for 39 months. Wait a minute: if a product is in high demand, doesn’t that usually drive prices up? What’s that? Oh right: Obamanomics. GM North America President Mark Ruess–that kidder–said:
This technology is here to stay, we have all kinds of people who want to copy it and go after it. We are not re-evaluating anything…The only question here is what the rate of sales will be.
That’s a good question Mr. Ruess, a good question indeed.
ITEM: Volts Are Selling Like—Well, Like, Well, OK, They’re Not…GM has announced that it is suspending Volt production for at least another week. Sales numbers haven’t been good in 2012. GM sold only 603 in January and 1,023 in February. However, according to GM something over 2000 have been sold in March. That means GM will have to sell at least 4597 Volts per month for the rest of the year to make its 2012 sales goal. [skip]
We are left with the same conclusions I reached early in my analyses of the Volt: If you can afford the initial purchase price that is as much as twice that of many comparable, conventional, high mileage vehicles, if you can afford $2000 for a fast charger and whatever it takes for installation, and if you can somehow manage to drive no more than 25 miles before having to recharge, you may save sufficient money on gas to break even in nine years at best. But if that’s you, even GM’s statistics put you in the top 7%–economically—of all American households, which means you’re probably not buying a Volt as a money-saving measure in the first place. That’s a small demographic, not nearly sufficient to support long-term production of a compact car.
Not a good formula for profitability, as I continued to explore in The Chevy Volt: Alternate Calculations:
Note the advertising blurb that opens this article. It’s on the GM-Volt site, and I’ve seen similar ads for local dealerships across the nation, indicating that it’s a GM ad provided to dealers. Wasn’t the Volt supposed to be an electric wonder? Weren’t the benefits provided by that technology its primary reason for being and the feature by which it would take the automotive world by storm? GM’s recent Superbowl Volt adtried to promote the high technology of the Volt. For the record, I rather liked the ad, particularly the apparently sexual reaction of the five aliens to the guy’s wife, but strangely, that was the best part of the ad. And now GM is downplaying the electric nature of the Volt, trying to sell it by saying ‘It’s more car THAN ELECTRIC’? Why not: ‘It’s not really much electric, honest!’ Strange times, this age of Obama. [skip]
(3) Taxpayer dollars, as I noted in my last Volt article, subsidize each Volt to the tune of around a quarter of a million dollars(?!). No wonder Chevy can afford to market a vehicle that not only makes no profit but actually loses money. Thanks to Mr. Obama, the Volt operates above and outside the reality of the free market.
I’d long predicted that after the Obama Administration, particularly if a Republican took the White House, the Volt would be on borrowed time. Greenie street cred is nice—in some quarters—but GM needs to make a profit, and the Volt has always been a bottomless money pit.
Six years ago, President Barack Obama promised to buy a Chevy Volt after his presidency.
I got to get inside a brand-new Chevy Volt fresh off the line,’ Obama announced to a cheering crowd of United Auto Workers activists. ‘Even though Secret Service wouldn’t let me drive it. But I liked sitting in it. It was nice. I’ll bet it drives real good. And five years from now when I’m not president anymore, I’ll buy one and drive it myself.’
Now it looks like Obama will not get his chance to make good on the promise. General Motors announced Monday that it would cease production of the hybrid electric plug-in Volt and its gas-powered sister car the Cruze. The announcement came as part of a larger restructuring by the car company as it seeks to focus production around the bigger vehicles in favor with U.S. consumers.
The Volt and the Cruze were two of the signature achievements of the partnership between the Obama administration and General Motors following the auto-industry bailout. Although the Volt was long-planned by GM executives, it received a lot of support from the administration. Obama described the Cruze as ‘the car of the future.’
Both cars reflected the policies of the Obama administration but never really caught on with the car-buying public. They initially enjoyed a brief bout of enthusiasm from consumers but this was short-lived. Particularly after the price of oil fell dramatically, American consumers moved on to larger vehicles such as SUVs.
Once again, market forces have prevailed. The Volt was never ready for prime time. It, and similar EVs, were purchased by the top 7% of the public in terms of income. They were, in effect, rich men’s toys, greenie street cred for those that could afford a second, third, fourth or more car that didn’t have to have the flexibility of a normal, gasoline powered vehicle. Oh, and the Cruz, the “car of the future,” is being discontinued as well.
This was inevitable, not only because EV technology is not sufficiently mature, and not only because the infrastructure necessary to make EVs remotely feasible just doesn’t exist, but primarily because General Motors is in business to make money, and the Volt was never profitable. During its production run, GM discontinued models, like the Chevy Avalanche, that sold far better than the Volt.
Pundits are trying to blame President Trump—he’s responsible for everything because Trump—for GM layoffs. He is blameless. Fundamentally at fault is GM, who fed at the government trough during the Obama era, and in return, built the Volt, a car that not only never made a penny, but lost dump truck loads of cash. There is evidence GM was working on the vehicle pre-Obama, but what explains throwing away untold millions on a vehicle that could never turn a profit?
The value of Volts on the used car market will now plunge dramatically. Who is going to buy a vehicle no longer manufactured, particularly when they realize they’re going to have to replace a battery—if they can find one—that will cost more than the vehicle itself? Many Chevy dealers would not sell Volts, and few had technicians trained in their repair and handling. Some dealers will surely do what they can with the remaining Volts, but it won’t take long for this particular chapter of automotive folly to close once and for all.
All should be glad about this, not that Volt owners will be stuck with essentially worthless vehicles, but that in one more, albeit small sector, government is not going to be involved in trying to choose winners and losers in the marketplace. Perhaps President Trump will even let the $7500 dollar tax credit lapse?
It’s been almost two full years since Obama was President – almost two full years during which the Volt was being produced – yet did he buy one?
Nobody, but nobody, believed him when he said that, at the time he said it. Hard to believe we live in a country where anybody ever believed anything that guy said.
Mike McDaniel said:
I’m sure he intended to buy one, but a video no one has seen or heard of prevented him from doing it. It’s not his fault.
My wife’s cousin is on his second Volt. He leased the first, drove it about 15 miles each way on his commute to work in Dallas, and raved about it to me. He was single at the time. Shortly after he got married, the lease expired and he turned it back in to the dealer, he was offered a spectacular purchase price on a new 2017 Volt. List price less $12,000 plus the tax breaks. He jumped on it and was very satisfied.
Then came the first child and the limited seating space put a cramp in family visits.
He now works from home, with only occasional visits to the office so it meets their needs for now, but he knows he will need a bigger car before child the second comes along.
When I visited in November I noted how well it met all the standards he had set: range, performance, charging time, etc. then we went for a twenty mile drive at night in a 40 degree temperature. Shortly after our start back from the restaurant I heard a gas engine start up. The lower temperature had drained the battery much faster than previous trips. So if they can’t survive in Dallas on a mild fall night, they would be a frozen block in Edmonton in January.
Mike McDaniel said:
Quite so. battery power vehicles are impractical in cold climes.
In Minneapolis, Hennepin County Attorney Freeman additionally charged Officer Noor with Second Degree Murder in the death of Justine Damond. Speculation is that he is upping the ante to get Mohammad Noor to strike a plea deal?
Mike McDaniel said:
Thanks for the link. I’ll deal with this later in the week.
Casey Tompkins said:
It’s not just a question of EV versus gas engine. GM has demonstrated a problem making money, not to mention changed in buyer preferences.
I am apparently in the minority in preferring a Civic hatchback. The move seems to be away from both smaller sedans and (to a lesser degree) large SUVs to crossover vehicles. Lord only knows why station wagons aren’t making a comeback. “Square” reputation, perhaps?
The move to crossovers has hurt small sedan sales. I don’t doubt the Volt has many reasons for poor sales, but the Toyota Prius seems to be doing well. On the other hand, Toyota and Honda are doing quite nicely in the small sedan market.
Aside from battery-pack woes, the biggest obstacle looks to be developing a network of charging stations across the country. One would expect large cities to lead the way, as they did with electrification & telephone systems, but today most large cities are hostile to any privately-owned vehicles.
When the internet made searching for information easy, I investigated EVs as alternative transportation to my 3/4 ton truck with a gas guzzling V10 (More Power!!! grunt grunt grunt). EVs were mainly hobby solutions, VW conversions and the like. I thought about getting a VW Karmann-Ghia and converting it to electric.
GM had an electric car, EV-1?, that was lease only and only in CA. They also made electric S-10 pickups and Ford made electric Rangers for fleet operations. Some of these pickups made it into the aftermarket. GM confiscated all of the EV-1s and destroyed them before coming out with the Volt. There was also the Sparrow, a three wheeled battery powered vehicle, that didn’t catch on.
My neighbor has a VW chassis with a Lotus fiberglass body converted to electric. He was driving it to work but his wife didn’t allow him to take their daughter in it for safety concerns. When the daughter started school, it became inconvenient to drive, so it sat. It’s still sitting about 15+ years later. It will probably still work with fresh batteries.
I have considered a Leaf for commuting to work but the additional cost is not worth it. Compared to my old truck, the payback would be quicker but not when compared to other small vehicles. I think the industry and technology needs to mature but not at taxpayer expense.
Mike McDaniel said:
What you said.
Hope the rabid tesla fanatics and elon musk groupies dont find your awesome blog as they tolerate nothing but devotion and adoration for all things electric automotive…..
Mike McDaniel said:
I occasionally get a true believer, but I’ve never been against EVs, only against my tax dollar supporting products that can’t survive in the marketplace on their own merits. I also feel something of an obligation to point out reality.
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